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Dangerous Drugs & Medical Devices News & Commentary on Prescription Drug & Medical Device Lawsuits

Allergan’s $600 Million Dollar Headache

Posted in FDA Regulation, Off Label Marketing

Drug marketing 101: The FDA approves drugs for specific ailments.  Drug companies may not market the drug to treat any other type of ailment.  If they do, it’s called off-label marketing and it is illegal.

Drug marketing 201: It’s often very profitable to engage in off-label marketing, because the fines you pay are less than the money you make doing it:

Allergan, the maker of Botox, agreed on Wednesday to pay $600 million to settle charges that it illegally promoted and sold the drug through 2005 for unapproved uses like treating headaches.

Source: Maker of Botox Settles Inquiry on Off-Label Marketing – NYTimes.com

Now, I don’t know for sure that off-label marketing netted Allergan more than $600 million dollars.  But, I do know that Allergan made several billion dollars selling Botox over the last few years.  $600 million is definitely a large fine, but it’s only effective if it is more money than they made by promoting it off-label.

An analogy I often use: If you only had to give back half of the money you got from robbing a bank, how many banks would you rob?